Hawaii Introduces 11% Tax on Cruise Passengers to Support Environmental Initiatives
Effective January 1, 2026, Hawaii will extend its Transient Accommodations Tax (TAT) to include cruise passengers, marking a significant policy shift aimed at bolstering environmental conservation efforts. Previously applicable only to hotel stays, the 11% TAT will now be prorated for the duration cruise ships are docked in Hawaiian ports. For instance, passengers on a 14-night voyage with three nights in Hawaiian waters will incur the tax on those specific nights.
This legislative change is anticipated to generate nearly US$100 million annually, with funds earmarked exclusively for environmental protection and climate resilience projects. These initiatives include beach restoration, infrastructure reinforcement against storms, and the removal of invasive species contributing to wildfire risks.
The measure has elicited varied responses from the cruise industry. NCL-Norwegian Cruise Line, operating the Pride of America—the only vessel offering weekly, closed-loop 7-night cruises within the Hawaiian Islands—has expressed strong opposition. The company has indicated potential legal action or the possibility of withdrawing its year-round vessel from the state, citing concerns over the financial impact of the new tax.
Governor Josh Green, a proponent of the legislation, is expected to sign the bill into law. The initiative positions Hawaii as the first U.S. state to directly link tourism-generated tax revenue to environmental and climate resilience efforts.
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